Fair Value Measurements

3 Months Ended

Mar. 31, 2026

Fair Value Measurements

Fair Value Measurements

3.Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

	Fair Value Measurements as of
	March 31, 2026
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents:
Money market funds	$	19,242	$	—	$	—	$	19,242
Short-term investments:
U.S. Treasury Notes		5,130		—		—		5,130
Total financial assets	$	24,372	$	—	$	—	$	24,372

	Fair Value Measurements as of
	December 31, 2025
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents:
Money market funds	$	20,011	$	—	$	—	$	20,011
Short-term investments
U.S. Treasury Notes		10,077		—		—		10,077
Total financial assets	$	30,088	$	—	$	—	$	30,088

The Company did not have any Level 3 assets or liabilities as of March 31, 2026 and December 31, 2025. There were no transfers between Levels during the periods presented.

The unrealized loss on the Company’s short-term investments for the three months ended March 31, 2026 and the unrealized gain on the Company’s short-term investments for the three months ended March 31, 2025 were not material.

Convertible Notes

In December 2024, Legacy Tvardi entered into a note purchase agreement to issue and sell convertible notes (the Convertible Notes) in an aggregate principal amount of $28.3 million. The Convertible Notes accrued interest at 8% per annum and had a maturity date of December 31, 2026. Upon the closing of the Merger in April 2025, the Convertible Notes converted into 1,265,757 shares of the Company’s common stock, $0.001 par value per share, in the aggregate. As a result, there were no Convertible Notes outstanding as of March 31, 2026 and December 31, 2025.

Since the Company elected the fair value option to account for the Convertible Notes, the change in fair value of the Convertible Notes of $4.9 million was recorded within other expense on the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025. For the three months ended March 31, 2025, the Company recognized $0.6 million in interest expense related to the Convertible Notes, which was recorded in other expense on the condensed consolidated statement of operations and comprehensive loss.